What happens to your debts after death?

Fremen

Does anyone know what happens to your debts when you die? If I got a huge bankloan and died a month later, for example, would my family receive the money or would it go back to the bank?

Hal1

Afaik your debts die with you. Once your house isn't at risk you should be fine

BendiBus

Hal1 wrote:

Afaik your debts die with you. Once your house isn't at risk you should be fine

Don't think so!

Your estate still owes the debt. But if your estate can't pay all the bills, creditors can't chase your relatives for money.

http://www.citizensinformation.ie/categories/death/after-a-death/the-deceased-s-estate/dealing_with_deceaseds_estate

dotsman

Hal1 wrote:

Afaik your debts die with you. Once your house isn't at risk you should be fine

Afraid it's not that easy. It's the banks money - not your family's. The bank will naturally claim it.

In the case of secured loans (mortage, car loan) they can just take it straight away. For unsecured credit, the bank would attemp (and most likely succeed) in taking it from your estate. It's for this reason that people take out life assurance, mortgage protection etc.

TheDriver

Its law afaik the have your mortgage insured against death at least so when you die, the mortgage gets paid by the insurance but after that, the executor to your will or estate will have to divide your money among your creditors i.e. the bank.

Hal1

Right so the bank will send the repo men around to 'settle the score' and seize anything of value, house, car, furnishings, and what becomes of the family wont home insurance cover them? do they have the screw all others attitude?

BendiBus

Hal1 wrote:

what becomes of the family wont home insurance cover them? do they have the screw all others attitude?

Mortgage protection will cover the home. Someone who wants to protect their family after they're gone will take out a life insurance policy which will be enough to pay out enough to pay off debts.

Insurance is important! If you have dependents then you need plenty of it.